Comparison of Loans: EIDL and PPP · NECA Fact Sheet: Comparison of Loans: EIDL and PPP 3 Bethesda...
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Economic Injury Disaster Loan (EIDL) Coronavirus Aid, Relief, and Economic Security Act: Paycheck Protection Program (PPP) What is it? Loan program for small businesses that have sustained substantial economic injury due to a disaster such that the business is unable to meet its obligations and pay ordinary expenses $350 billion loan program for small businesses Who is eligible? Any small business, as defined by the SBA Eligibility is subject to aggregation with affiliated entities, with limited exceptions Employers with fewer than 500 employees (unless the SBA allows a higher number for the applicable industry) Eligibility is subject to aggregation with affiliated entities, except for: • Businesses operating as a franchise with a franchise identifier code assigned by the SBA Where do I apply? Apply online at https://disasterloan. sba.gov/ela/ Apply through thousands of banks across the country providing small business loans How much can I get? Up to $2 million based on working capital needs 250% of your average monthly payroll for the period February 15, 2019, to June 30, 2019; capped at $10 million Special calculations apply for seasonal businesses and businesses not open during period above How can I use the money? Business-related needs Any EIDL Loan obtained between February 15, 2020 and June 30, 2020, may be refinanced into a PPP loan Any business-related expense between February 15 and June 30, 2020, but only amounts spent on certain expenses will be eligible for forgiveness (see below) NECA Fact Sheet Comparison of Loans: EIDL and PPP 3 Bethesda Metro Center Suite 1100 Bethesda, MD 20814 301-657-3110 • www.necanet.org
Transcript of Comparison of Loans: EIDL and PPP · NECA Fact Sheet: Comparison of Loans: EIDL and PPP 3 Bethesda...
Economic Injury Disaster Loan (EIDL)
Coronavirus Aid, Relief, and Economic Security Act: Paycheck Protection Program (PPP)
What is it?
Loan program for small businesses that have sustained substantial economic injury due to a disaster such that the business is unable to meet its obligations and pay ordinary expenses
$350 billion loan program for small businesses
Who is eligible?
Any small business, as defined by the SBA Eligibility is subject to aggregation with affiliated entities, with limited exceptions
Employers with fewer than 500 employees (unless the SBA allows a higher number for the applicable industry)
Eligibility is subject to aggregation with affiliated entities, except for:
• Businesses operating as a franchise with a franchise identifier code assigned by the SBA
Where do I apply?Apply online at https://disasterloan.sba.gov/ela/
Apply through thousands of banks across the country providing small business loans
How much can I get?
Up to $2 million based on working capital needs
250% of your average monthly payroll for the period February 15, 2019, to June 30, 2019; capped at $10 million
Special calculations apply for seasonal businesses and businesses not open during period above
How can I use the money?
Business-related needs
Any EIDL Loan obtained between February 15, 2020 and June 30, 2020, may be refinanced into a PPP loan
Any business-related expense between February 15 and June 30, 2020, but only amounts spent on certain expenses will be eligible for forgiveness (see below)
NECA Fact Sheet
Comparison of Loans: EIDL and PPP
3 Bethesda Metro Center Suite 1100Bethesda, MD 20814301-657-3110 • www.necanet.org
Economic Injury Disaster Loan (EIDL)
Coronavirus Aid, Relief, and Economic Security Act: Paycheck Protection Program (PPP)
Interest rate 3.75% < 4%
Collateral Likely No
Personal guarantee
No No
Upfront loan fees No No
When will I receive funds?
Payout is monthly or quarterly and any advance (up to $10,000) will be made within three days of application
TBD; but expected sooner than EIDL
What if I don’t have many employees?
May be better for asset-heavy/employee-light businesses
May be better for employee-heavy businesses
Will this be forgiven?
No Yes — the amount forgiven is based on the ratio of headcount maintained during the eight-week period
What can be forgiven?
N/A Eight weeks of eligible expenses; (payroll, utilities, rent and mortgage interest)
Deferment Deferred for one year Deferred for six to 12 months
Can I utilize payroll tax credits with this loan?
Yes No
Term 15-30 years 10 years for amount that is not forgiven
Pre-payment penalty
No No
NECA Fact Sheet: Comparison of Loans: EIDL and PPP
3 Bethesda Metro Center Suite 1100Bethesda, MD 20814301-657-3110 • www.necanet.org faegredrinker.com © 2020 Faegre Drinker Biddle & Reath LLP. All rights reserved.
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